Council extends DSDC contract 30 days amid transparency, term concerns

The Smithfield Town Council on a motion carried Monday moved to extend the current municipal service district contract with the Downtown Smithfield Development Corporation (DSDC) for 30 days while staff and the nonprofit finalize language on reporting and contract terms.

At a public hearing opened under North Carolina General Statute 168‑536 (section D1), staff presented the results of a single RFP and recommended continuing the DSDC relationship with performance benchmarks and annual reporting. Kim Picket, who presented the staff recommendation, said the bid process produced one response and that staff added performance and benchmark goals to the proposed contract and asked council whether the term should be three or five years; she noted the statute permits up to five years.

Councilman Michael Scott pressed for clearer financial transparency because tax district dollars flow to the DSDC. "How the tax dollars are spent" was a central question, he said, asking whether a 501(c)(3) that receives MSD funds could be required to comply with the town's public‑records expectations.

Heidi Gilman, director of the Downtown Smithfield Development Corp., answered during the public hearing: "We don't have a public record policy. However, we have no problem sharing meeting minutes or any of that information that we talk about in our meetings. Everything that is spent is approved by the board in a public way." Gilman also provided budget context, saying the DSDC received just over $100,000 from the MSD this fiscal year and that the organization's total recent budget was about $568,000, funded by event fundraising, sponsorships, donations and grants.

Staff and council discussed a compromise path: require published annual budgets and quarterly updates to council, add performance reporting language to the contract, and include an exit provision. Councilman Scott proposed, and later moved, language to extend the current contract 30 days and to revisit a contract that would contain a three‑year term with a 90‑day exit ramp; the mayor seconded the motion. The motion "carries" as recorded in the meeting minutes; no detailed roll‑call tally was recorded in the transcript.

The council closed the public hearing and placed the revised contract language for negotiation and final consent consideration at a near‑term meeting so the DSDC would not experience an interruption of services or payments while the parties finalize transparency and term provisions.

The public hearing record included discussion about what financial information a 501(c)(3) must disclose: Gilman noted employee salary information is reported in the DSDC's annual filings and that the DSDC's meetings are public. Staff said the town receives audits and budget materials; the council asked staff to bring back specific contract language that balances transparency for MSD funding with the operational concerns of a volunteer board.

Next steps: staff will draft contract language reflecting the council's direction and bring it back for consideration within the 30‑day extension period.